NATO's Parlamentariske Forsamling 2011-12 NPA alm. del Bilag 7 Offentligt POLITICAL 184 PCNP 11 E bis Original: English NATO Parliamentary Assembly SUB-COMMITTEE ON NATO PARTNERSHIPS BELARUS – A DIFFICULT PARTNER REPORT DANIEL BACQUELAINE (B ELGIUM ) RAPPORTEUR International Secretariat October 2011 Assembly documents are available on its website, http:// www.nato-pa.int 184 PCNP 11 E bis i TABLE OF CONTENTS I. INTRODUCTION 1 II. DOMESTIC ISSUES 1 III. REGIONAL SECURITY AND RELATIONS WITH NEIGHBOURS 3 A. RUSSIA 4 B. BELARUS-EU RELATIONS 5 C. BELARUS-NATO RELATIONS 7 IV. CONCLUSIONS 7 184 PCNP 11 E bis 1 I. INTRODUCTION 1. Though sharing borders with three NATO member states, Belarus has not been high on the agenda of the Alliance. However, because of its geographical position, the country plays an important role in European stability. Moreover, Belarus serves as an important energy corridor between Russia and Europe. Although Minsk has a close, if sometimes difficult, relationship with Moscow, it is a NATO partner country and participates in a number of its programmes. Co- operation remains limited, though, and Minsk’s crackdown on the opposition following the latest presidential election in Belarus has minimised the chance for short-term improvement in its relations with the West. The latest wave of revolutionary upheavals in the Middle East and North Africa highlights the need for a continuous and serious assessment of the evolving situation in Belarus. This report examines Belarus’ foreign and security policy, its relations with the Alliance and with its neighbours. The paper also briefly refers to the latest domestic developments in the country and includes some recommendations for a conditions-based policy of engagement with Minsk. II. DOMESTIC ISSUES 2. As one of the Soviet Union’s successor states, the Republic of Belarus gained its independence in 1991. The current president, Alexander Lukashenko, founder of the faction “Communists for Democracy,” came to power on a populist platform in 1994, following the short rule of Stanislav Shushkevich. Belarus’ political decision-making system is highly centralized and the regime is authoritarian. The main power levers in Belarus are in the hands of the President who has sweeping executive authority. Notable experts and public figures, such as former US President George W. Bush, have described Belarus as the "last remaining dictatorship in Europe". Presidential powers were significantly increased by constitutional amendments in 1996 and again in 2005, when presidential term limits were removed altogether. The President exercises unchecked control over the bureaucracy, including the security apparatus, the military and the law enforcement agencies. The constitution states that presidential decrees have more binding legal force than ordinary legislation. Political parties play only a marginal role in the country’s political process. More than two thirds of the candidates registered for the 2008 parliamentary election were not affiliated with any one political party but were non-partisans loyal to the government. No opposition party made it to the National Assembly during the last elections. As Dzianis Melyantsou shared with the Political Committee during the 2010 Annual Session in Warsaw, there is no viable opposition to counter Mr Lukashenko’s rule. In fact, the opposition lacks unified leadership and the party structures are only poorly developed. One of the reasons why the opposition remains weak and divided is that a large part of the economy is state-controlled, thus providing the President with the financial means to constrain any party perceived as a threat to his power. 3. Civil society in Belarus is weak and has no firm hold. The government places severe limits on media freedom. Belarus ranks 154 th out of 178 countries according to the Press Freedom Index of “Reporters Without Borders”. The vast majority of print media in Belarus is state-owned, with a small number of privately-owned newspapers of limited circulation. Print media outlets are obliged to register with the state press distributor. In 2010, Belarus ranked 127 th on Transparency International’s Corruption Perception Index, with a score of 2.5 while Freedom House characterizes it as “not free”. 4. Despite its authoritarian character, the regime enjoys a modicum of domestic approval, which is largely contingent upon the artificial sustenance of the economy and only presents a vague reflection of the economic fundamentals. Mr Lukashenko’s carefully crafted image as Belarus’ indispensable leader has been considered favourably by the broader audience, especially among rural constituencies. Although waning, his popularity owes to the fact that the regime provides some, if little, stability in uncertain times and the fact that Belarus has remained relatively shielded 184 PCNP 11 E bis 2 from the economic malaise experienced in Russia or Ukraine following the collapse of the Soviet Union. For the most part, the social contract in Belarus can be described as the exchange of basic economic survival for political loyalty and restraint from social activism. 5. In comparison to the other successor states of the former Soviet Union, Belarus has, so far, enjoyed notable socio-economic stability. State-owned industries employ more than half of the population - unemployment is very low and there is little income inequality. The state offers generous social services in the form of healthcare, pensions, education and others. The economy is centrally managed, with a heavy industrial base that is largely unreformed (contributing to approximately 52 % of the country’s GDP). However, the economic picture is deteriorating fast and it seems unlikely that Minsk will be able to maintain current levels of economic and social stability - rising inflation and a steep decline in the country’s foreign exchange reserves have put increasing pressure on the government. 6. The latest report on Belarus conducted by the European Bank for Reconstruction and Development reveals that the country is experiencing a “severe balance of payments crisis, triggered by large direct lending, rapid growth of public sector wages and pensions, and loose monetary policy.” 1 In May 2011, Belarus devalued the ruble by 36%, which led to an increase in import prices and caused panic among the public. Instead of allowing a rebalancing of domestic and external demand, the government exerted greater control over the currency and consumer markets, a move that was anticipated to add more stress to the financial framework, which witnessed 44 per cent inflation in June alone. The multiplicity of currency exchange rates is seen as one of the drivers for inflation, which is projected to average between 55-75% by the end of the year. The country’s hard currency reserves have fallen by $100 million over the past month alone. 2 The head of the Belarus Ministry for macroeconomic analysis predicted that consumer prices would continue to soar. Furthermore, basic commodities have disappeared from the shelves, prompting consumer hoarding, as producers choose to sell their products in neighbouring Russia, where the currency is stable. 7. Rating agencies, such as Moody’s, downgraded Belarus’s foreign and local-currency government bond ratings, making them the lowest-rated in Eastern Europe. Moody’s also forecast that the ruble may soon decline by as much as 50% against the US dollar. In late August, Mr Lukashenko surprisingly announced that he would let the ruble float starting in mid-September, declaring his intention to defend the currency, adding that Belarus anticipated a $ 5 billion loan, although he did not specify its origin. The IMF had also urged Belarus to float the ruble and close the gap between the currency’s multiple exchange rates. In May 2011, Belarus requested a substantial loan from the IMF, which had extended a total of $3,46 billion to Belarus in 2009 and 2010 under its stand-by agreement. The outcome of the IMF negotiations is not yet clear but denying Minsk a much-needed loan could further boost Moscow’s influence. While Mr Lukashenko seeks to display a certain level of control over the situation, analysts indicate that the crisis is only in the initial stages and that it is far more deeply-rooted and systemic than a short-term recession. 8. The 2010 presidential elections and the ensuing political repression put an end to the cautious steps towards economic and political liberalisation that had been taken in the second half of 2009. Assessing the conduct of the last elections, international observers concluded that “Belarus has a considerable way to go in meeting its OSCE commitments for democratic elections”. While the 2010 campaign represented an improvement upon previous elections campaigns, problems remained. Noting that the government did not conduct a transparent vote count and did not allow opposition parties to monitor that count, the OSCE election monitoring team categorised the vote counting in nearly half of the constituencies as “bad or very bad”. 1 EBRD. 2 http://blogs.ft.com/beyond-brics/2011/09/06/moodys-belarus-rouble-to-fall-up-to-50 184 PCNP 11 E bis 3 9. In the ensuing crackdown, police arrested approximately 700 people, including seven of the nine presidential candidates. Forty-two were charged with organising a riot, an offence carrying a prison term of five to 15 years. Soon after, Belarus decided not to renew the mandate of the OSCE Office in Minsk, which was forced to cease its operations. The crackdown prompted the European Union (EU) and member states of the Alliance, including the United States and Canada, to impose travel restrictions and asset freezes upon President Lukashenko and 170 other top Belarusian officials. In contrast, Russian President Dmitry Medvedev congratulated Alexander Lukashenko on his victory. 10. Since early June 2011, protesters in Belarus have resorted to utilizing social media such as VKontakte, the Russian equivalent of Facebook. An Internet group called “Revolution through the Social Network” has been organizing weekly demonstrations, taking the form of silent marches, with protestors playing a single tune on their mobile phones while clapping in unison.